a daily price action after hour update - sp500
Good evening and I hope you are well.
Today bears actually showed up and bulls began the profit taking. Very refreshing to see some two sided trading and not making more ath. I do think for all indexes the selling was strong enough to get another leg down, which then is mostly a third leg or W5 and markets are or will then trade at bigger support prices, trend lines and daily 20emas.
sp500
Yesterday I gave 5230 as a measured move target and low of the day was 5235, hope you made some.
bull case: Bulls are one more red day away from giving up control of the market and we go into neutral territory. 20ema was hit today but market closed above (currently around 5246). Bulls will probably get to the 1h 20ema and a retest of the breakout below the bull trend line (view chart). It’s already almost there and the reaction there is important. For bulls to retake full control, they need to break out of the red bear channel and trade above the 1h 20ema again, currently at 5270.
bear case: Market has now broken all bull trend lines and once we have a daily close below the 20ema, bulls are probably done. Retest of the breakout and upper bear channel line will probably happen in the Globex session and I expect market to hover around open/close price from today before EU session tomorrow. Bears want a third leg down which would bring us probably to around 5210/5200 and the chance that we break that on the first try is very low. Below 5200 is 5185ish next. Invalid above 5290.
short term: Sideways to down - bulls want back above 5290/5300 and bears want to stay inside the bear channel for a third leg down to around 5210/5200.
medium-long term: Below 5200 I keep my bearish thesis as drawn (weekly outlook). above we can go much higher before down. we could also range above 5000 for many months without going nowhere. I expect earnings to become weak in this quarter (Q1 - Banks begin reporting next week) but could take next one as well. —unchanged
trade of the day: Short at upper bear channel line and 1h 20ema. Perfect signal to short and was good for 61 points.
Today bears actually showed up and bulls began the profit taking. Very refreshing to see some two sided trading and not making more ath. I do think for all indexes the selling was strong enough to get another leg down, which then is mostly a third leg or W5 and markets are or will then trade at bigger support prices, trend lines and daily 20emas.
sp500
Yesterday I gave 5230 as a measured move target and low of the day was 5235, hope you made some.
bull case: Bulls are one more red day away from giving up control of the market and we go into neutral territory. 20ema was hit today but market closed above (currently around 5246). Bulls will probably get to the 1h 20ema and a retest of the breakout below the bull trend line (view chart). It’s already almost there and the reaction there is important. For bulls to retake full control, they need to break out of the red bear channel and trade above the 1h 20ema again, currently at 5270.
bear case: Market has now broken all bull trend lines and once we have a daily close below the 20ema, bulls are probably done. Retest of the breakout and upper bear channel line will probably happen in the Globex session and I expect market to hover around open/close price from today before EU session tomorrow. Bears want a third leg down which would bring us probably to around 5210/5200 and the chance that we break that on the first try is very low. Below 5200 is 5185ish next. Invalid above 5290.
short term: Sideways to down - bulls want back above 5290/5300 and bears want to stay inside the bear channel for a third leg down to around 5210/5200.
medium-long term: Below 5200 I keep my bearish thesis as drawn (weekly outlook). above we can go much higher before down. we could also range above 5000 for many months without going nowhere. I expect earnings to become weak in this quarter (Q1 - Banks begin reporting next week) but could take next one as well. —unchanged
trade of the day: Short at upper bear channel line and 1h 20ema. Perfect signal to short and was good for 61 points.